PROBLEM: Due to the economic evolution from physical production to more capital-light businesses, traditional measures of value have lost meaning and comparability. Additionally, traditional risk metrics focus on short-term price volatility, while fundamental stability and financial strength matter more to long-term investors.
SOLUTION: By using updated, cash-flow-based definitions of value and quality that are relevant to long-term investors and circumvent accounting distortions, our investment process distills starting indexes into only the most fundamentally stable and attractively valued securities.
Below are three papers that further explain this methodology. Additional papers can be found on our Insights page.